Crossbreeding of sheep is practiced to exploit simultaneously the use of additive and nonadditive genetic effects. The goal is to achieve optimal levels of performance appropriate for defined systems of sheep production and marketing. Although the beneficial effects of individual and maternal heterosis on sheep production have been well documented and widely implemented, considerably less is known about the effects of paternal heterosis. Limited evidence suggests that crossbred rams are more sexually aggressive and exhibit greater testicular growth than do purebred rams. Average estimates of paternal heterosis effects were 1.4, -.7 and 2.3% for seasonal fertility, prolificacy and preweaning survival, respectively. The average effect of paternal heterosis on fertility during spring breeding was 29.5%. Progeny of crossbred and purebred sires were similar in birth weight, weaning weight and postweaning growth rate and in phenotypic variation for these growth traits. However, favorable paternal heterosis effects need not exist to warrant the use of crossbred sires. Composite or F1 sires can be used as an effective method to manage the composition of additive breed effects. For example, varying proportions of germ plasm from highly prolific breeds such as the Finnsheep and Romanov can be realized through the use of crossbred sires to set reproductive rates at desired levels. Crossbred sires may be used to a greater extent to optimize additive breed effects than to exploit effects of paternal heterosis. The role of composite breeds in managing both additive and nonadditive effects is discussed.